Once you’ve determined a reverse mortgage is right for you—and you meet the eligibility requirements—the application process is very similar to the process with a traditional mortgage.
What Documents Do I Need to Provide to Lenders?
While not a comprehensive list, here is a general list of information you will likely be asked to supply:
Proof of Identification and Age
You’ll need to prove who you are and that you’re at least 62 years old. This can be accomplished with copies of your:
- Valid driver’s license or state-issued ID card
- Social Security Card
Proof That Your Home is Your Primary Address
You must be able to prove that your home is your primary residence for the life of the reverse mortgage. So, a lender will want copies of:
- Property title/deed
- Homeowner’s Insurance Declaration Page showing agent name and number
- Property tax receipt
- Current mortgage statement or proof of mortgage satisfaction
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Proof of Sufficient Income
Your income and credit history will be evaluated because a reverse mortgage requires that you maintain your home in good condition and pay your property taxes and homeowner’s insurance on time. Depending on how you earn your income, or if you’re retired, your lender may be looking for copies of your:
- Tax records
- Two to three months of bank or retirement account statements (including 401K, pension plans, annuities, etc.)
- Paycheck stubs
- W2s
- Social Security award letter
- Durable power of attorney, trust agreement, or conservatorship (if applicable)
Proof of Reverse Mortgage Counseling
Before you can apply, the U.S. Department of Housing and Urban Development (HUD) requires that you first undergo reverse mortgage counseling from a certified agency. This really is in your best interest because the counseling session helps you fully understand the loan process, the loan terms, and what other options may be available to you.
Once you’ve completed your counseling, you’ll receive a certificate, and in this case, you’ll need to provide the original to your lender.
How Do I Apply for a Reverse Mortgage?
If you’ve applied for a traditional mortgage, the application process for a reverse mortgage is very similar. Here’s what you can expect:
- If you don’t already have a reputable lender you want to work with, you can find one on the National Reverse Mortgage Lenders Association website. Fill out and submit your application. This can be done online or in person. Your income and credit are then evaluated.
- Next, your home is appraised by an FHA-approved appraiser.
- A final signing is scheduled if your loan is approved, where closing costs and interest rates are calculated.
- You’ll have a three-business-day rescission period after the closing to cancel your loan if you wish.
- After those three days, if you haven’t canceled, you will receive your payment.
Before you apply for a reverse mortgage, it’s a good idea to go over your goals and options with a financial advisor. And many lenders offer a free reverse mortgage calculator which estimates how much money you may qualify for.
Seniority is published by Finance of America Reverse LLC. The views expressed in this publication are those of the author alone and do not necessarily reflect the views and opinions of Finance of America Companies. This article is intended for general informational and educational purposes only and should not be construed as financial or tax advice. For more information about whether a reverse mortgage may be right for you, you should consult an independent financial advisor. For tax advice, please consult a tax professional.
